The decision to include the Chinese renminbi in the currency basket that determines the value of the IMF's reserve asset seems to be a done deal. Far from having been made on solid economic grounds, the decision can only be understood as political, which means that the long-term consequences are likely to be regrettable.

SANTA BARBARA – The Chinese government’s campaign to have its currency, the renminbi, included in the International Monetary Fund’s reserve asset appears to be on the brink of success. Last week, IMF staff formally recommended adding the renminbi to the basket of currencies that determines the value of its so-called Special Drawing Rights (SDRs).